Bitfi is a crypto hardware storage system that claims to be “the most secure system ever created”. Find out everything you need to know about Bitfi today in our review.
What is Bitfi?
Bitfi, found online at Bitfi.com, is a hardware wallet shaped like a smartphone. The first version of the Bitfi wallet launched in 2018. A second version of the Bitfi wallet called Bitfi Knox was launched in March 2019.
As of December 2019, Bitfi has launched the newest version of its Bitfi firmware – DMA-3. The firmware is available to download from Bitfi.com. You download the firmware to upgrade an old Bitfi device. You can also buy a new Bitfi Knox wallet for $199 (the original Bitfi retailed at $120).
When the first version of Bitfi launched in 2018, Bitfi’s team – including evangelists like John McAfee – described the wallet as “unhackable”. Bitfi was ridiculed for its bold claim, and hackers quickly broke into the wallet. Bitfi quietly removed the “unhackable” slogan from its website, and McAfee admitted the whole thing was a marketing stunt.
Today, Bitfi continues to make bold claims about its security. Bitfi’s official website describes the wallet as “the most secure system ever created” and “the world’s only technical leap that surpasses cold storage.” It claims to be a new and improved version of a hardware wallet, offering enhanced security while still giving users convenient access to their funds.
Bitfi is careful to explain that it’s not actually a wallet. Instead, it’s a private key generator. You can lose your Bitfi wallet and still remain in complete control of your funds. As the website explains, “device loss is simply irrelevant to the safety of funds”, and Bitfi’s technology “allows you to be independent of the device, in case of loss, theft, seizure, or accident.” If you lose your Bitfi, then you can simply buy another one to restore access to your funds. You can even securely restore funds on a friend’s Bitfi device.
Is any of this true? Or is this just more marketing? Let’s take a look at Bitfi’s features, including how Bitfi works and how to setup and use Bitfi for the first time.
Bitfi offers all of the following core features:
Open-Source Blockchain Interface: Bitfi uses an open-source blockchain to secure private keys for clients. That means your private keys are not technically stored on Bitfi; instead, your private keys are stored on blockchains.
Private Key Generator: Bitfi is not technically a wallet. The device describes itself as a private key generator. We’ll explain more about how Bitfi works below.
Billions of Dollars Stored: Bitfi claims its ecosystem “secures billions in USD value”, although it’s unclear how many users use Bitfi to store cryptocurrency.
Manage Digital Assets Via Any Internet-Connected Device: Bitfi lets you manage your Bitfi-secured digital assets using any internet-connected device, including a smartphone, computer, tablet, or whatever else you want to use.
No Private Keys: Bitfi claims to be the world’s only wallet that doesn’t have private keys, which makes it impossible to seize, lose, or steal. Instead of actually storing private keys, Bitfi lets you store private keys on blockchains.
Automatic Updates With No Manual Updating Required: Bitfi can be used without ever manually downloading and installing an application from third parties. All updates are delivered automatically over Wi-Fi. Just turn on the device, connect it to Wi-Fi, and updates will begin.
Open Source: There was some controversy when Bitfi first launched as to whether or not it was truly open source (some small, proprietary components were not fully open source). Today, however, Bitfi’s code is completely open-source, and proprietary tools are available for anyone to check on Bitfi.dev. You don’t have to trust Bitfi with the integrity of the code. You can see it for yourself.
No 12 or 24 Word Backups: Anyone who finds a list of 24 words instantly knows it’s a crypto backup. It’s a major attack vector. Bitfi avoids this issue entirely, and backup seed phrases are completely eliminated from Bitfi.
Every Bitfi Device Is Unique: Each Bitfi device has a unique package in the firmware, which means every Bitfi device is technically different from every other device. This is different from cold storage devices, which are all identical unit to unit and batch to batch. Because of this feature, it’s “nearly impossible” to counterfeit Bitfi devices, according to the official website.
Native Interface: Bitfi has its own native interface, and the device doesn’t really on any third-party tools to operate. All digital assets are displayed in one place with balances and USD displayed.
Customized Version of Android: Bitfi is built on a heavily modified version of Bitfi, which makes Bitfi a highly-secure Android device. This was initially controversial when bitcoin launched, as certain known (minor) Android exploits were present in the device.
Locked Bootloader: Bitfi claims to be “the only consumer device with a locked bootloader”, which makes code injection impossible. Unlike other Android devices, you can’t unlock the bootloader to gain root access to the device.
Wi-Fi-Enabled: Unlike with a traditional cold storage system, Bitfi is Wi-Fi enabled, which means you can control your digital assets with any internet-connected device. Bitfi claims to use Wi-Fi instead of wired connections “to completely isolate the most critical functions from the computer so that there is no possibility of exposure to malware.”
Create Unlimited Wallets: Your entire family can secure their crypto using a single Bitfi device. Every wallet you create on Bitfi is controlled and accessed by your own custom 6-character salt and 30-character passphrase. You can create as many wallets as you need. You just need to remember to back up all your salts and passphrases for each wallet created.
Standard Android Design: You may be shocked at Bitfi’s design when you first unbox it. It’s been described by many as “like a cheap Android phone”. Essentially, that’s exactly what Bitfi is. Bitfi isn’t made from platinum or other fancy metals. It’s not embossed to look like a wallet. After all, Bitfi isn’t a wallet, and you don’t need the device to access your crypto funds. It’s like a 3.9” touchscreen Android tablet.
Blue Case: With the new version of Bitfi (Bitfi Knox or Bitfi 2), you get a blue case with the Bitfi logo and the word ‘KNOX’ on the front.
How Does Bitfi Work?
Bitfi works in a different way from a conventional bitcoin wallet. In fact, as the Bitfi website explains, it’s not a traditional wallet at all. Bitfi does not permanently store your private keys. Instead, your digital assets are stored on those digital assets’ blockchains.
When you want to make a transaction with your assets (like moving them or selling them), you simply enter your 6-character (minimum) salt and your 30-character (minimum) passphrase into your Bitfi device. Then, Bitfi calculates your private keys for any given token on-demand, then immediately expunges that private key.
Because of this unique system, your private keys are never permanently stored on the Bitfi, never left on the Bitfi, and are never sent in a transmission from the Bitfi device to the blockchain to control your assets.
Here’s the process broken down in step by step form:
Step 1) Open Bitfi, then choose ‘Send’ to move or sell your bitcoin
Step 2) Input a sending address (a public key or wallet address) into Bitfi
Step 3) A signing request is sent to Bitfi
Step 4) You input your salt and passphrase into Bitfi
Step 5) Bitfi calculates the private key, sends an ‘okay’ to the blockchain to release your bitcoin to the sending address
Bitfi updates itself automatically when you connect to Wi-Fi. Aren’t over the air (OTA) updates a security problem? Not quite. As the official website explains, Bitfi’s software “is sent through discreet nodes the devices are hardcoded into and contain private key signatures that require a multi-verification process for any Bitfi device to connect to and eventually accept.” Because of this feature, rogue updates and malware are rejected by your device (they don’t have the required digital signatures).
Another nifty feature of Bitfi is that multiple users can secure their crypto wallets using a single Bitfi device. You can create an unlimited number of wallets using a single Bitfi device. As long as you remember the salt and passphrase for each wallet, you can always access the funds for each wallet.
All coding for Bitfi is an open-source. You can even use your secret phrase to calculate your private keys using the open-source resources available on btknox.org. The code is open to review for anyone.
Here’s what Bitfi’s tech specs look like:
- Dimensions: 6.7cm (2.64″ in.) wide x 11.5cm (4.53″ in.) tall x 0.8cm (0.32″ in.) deep
- CPU: Quad-core CPU
- Wi-Fi: 2.4GHz
- Display: 3.95” touchscreen with a narrow viewing angle for enhanced security
- Battery: Fully charges within 1 hour and lasts 10 days in standby
Inside, Bitfi is built like a cheap, basic Android device. There’s not even an internal storage unit. The first version of Bitfi used a Mediatek chipset. That chip, an 8GB eMMC chip, loads libraries into the Bitfi internal memory (ROM) on startup to run applications. It’s like a 3.9” Android tablet with a touchscreen.
Is Bitfi really unhackable? That part is controversial. When Bitfi launched in 2018, John McAfee famously offered $100,000 to anyone who could break into the “unhackable” wallet. Nobody ultimately claimed that prize, although the community quickly stripped down Bitfi to reveal the cheap Android architecture inside. Within a few weeks, other members of the community were able to cold boot attack Bitfi to gain root access. Bitfi didn’t wipe the RAM clean, which means it’s possible to steal funds even when a Bitfi wallet is switched off.
The newer versions of Bitfi (DMA-2 and DMA-3) appear to have fixed this upgrade, but Bitfi has struggled to shake the “unhackable” claims it made at launch.
The original Bitfi is priced at $120 USD.
The new Bitfi 2 (Bitfi Knox), launched in March 2019, is priced at $199.
How to Use Bitfi
Using Bitfi is different from a traditional crypto wallet. However, the setup process is still designed to be as easy as possible for new and advanced crypto users alike.
Step 1) Buy Bitfi
First, you need to buy the Bitfi hardware device from Bitfi.com. The original Bitfi is priced at $120, although the new Bitfi 2 is priced at $199.
Step 2) Register
Once you receive your Bitfi wallet in the mail, you’ll need to sign up at Bitfi.com.
To login, enter the 6-digit code on your hardware wallet into the Bitfi.com sign-in screen.
Step 3) Setting Up the Wallet
To set up the wallet, click on the wallet ID. You’ll be taken to a dashboard. Next, you’ll be asked to create a “salt”. You can generate the salt from any easy-to-remember information – like an email address or mobile phone number.
Think of your salt as your username. It lets you sign in to your wallet on other devices.
Step 4) Create your Secret Phrase
Next, you’ll need to create a secret phrase. Typically, a wallet creates this phrase for you by generating 12 or 24 random words. Bitfi has deliberately left this part up to you, as using your own random method is much more secure than using a pre-defined method. Bitfi even ships with a die to help you create a random phrase.
Your secret phrase needs to have a minimum of seven words with special characters or nine words without any special characters. You’re free to exceed this amount (most seed phrases have 12 words).
to create a 12-word secret phrase using the Bitfi randomizing system, you’ll need to roll the die five times per word, or 60 times overall. You use this word list, look up each five-digit number, then write down the associated word. Yes, this part can take some time.
Step 5) Enter Your Salt and Passphrase
Now you’re ready to log in and use Bitfi. Enter the salt and secret phrase on the device and bring up the wallet address. A QR code will pop up. Scan that QR code from a wallet you have, then send funds to Bitfi for storage.
Step 6) Access Your Wallet from Anywhere
Remember: Bitfi calculates a private key for your wallet every time you log in. You don’t have to use your Bitfi wallet. You can access your funds from any other Bitfi wallet just by entering your salt and passphrase. You can use a friend’s Bitfi, for example, or order a new one.
That also means nobody can really steal your Bitfi wallet. If someone gains access to your Bitfi device, they won’t be able to access your crypto without knowing your salt and passphrase. In fact, your crypto isn’t really on Bitfi at all; it’s stored in the blockchain of whatever cryptocurrency you’re using.
Bitfi, Inc. describes itself as “a global payments technology company”. The company is headquartered in Asheville, North Carolina, USA, with the core Bitfi team spread out across the United States and around the world.
You can contact the company by email at firstname.lastname@example.org, by phone at (828) 357-7004, or on Twitter @thebitfi.
Bitfi was launched back in 2018 with claims of being “unhackable”. In 2019, Bitfi launched a new version of Bitfi called Bitfi Knox or Bitfi 2. As of December 2019, Bitfi is shipping its DMA-3 firmware, which the company claims are the most secure system ever created.
Despite the controversy over the device’s security and overall usefulness, Bitfi continues to occupy a unique niche in the crypto hardware space. It’s kind of like a second factor in two-factor authentication (2FA) setup. It’s not technically a crypto wallet. Instead, it functions more like Google Authenticator.
Using Bitfi can be a slow and clunky experience, but it does seem to secure your bitcoin – even if it’s an arduous process. You can learn more or check out Bitfi for yourself at Bitfi.com.
I’m Aziz, a seasoned cryptocurrency trader who’s really passionate about 2 things; #1) the awesome-revolutionary blockchain technology underlying crypto and #2) helping make bitcoin great ‘again’!